D. Income Taxes

GBL and its greater than 80% owned operating subsidiaries file a consolidated federal income tax return. Accordingly, the income tax provision represents the aggregate of the amounts provided for all companies.

The provision for income taxes for the years ended December 31, 2016, 2015 and 2014 consisted of the following:

	2016			2015			2014
(In thousands)
Federal:
Current	$	63,991		$	47,699		$	58,194
Deferred		(4,424	)		(1,441	)		(2,876	)
State and local:
Current		6,652			5,359			6,595
Deferred		(1,113	)		109			(179	)
Total	$	65,106		$	51,726		$	61,734

A reconciliation of the Federal statutory income tax rate to the effective tax rate is set forth below:

	2016			2015			2014
Statutory Federal income tax rate		35.0	%		35.0	%		35.0	%
State income tax, net of Federal benefit		1.0			2.7			2.5
Other		(0.3	)		(0.5	)		(0.8	)
Effective income tax rate		35.7	%		37.2	%		36.7	%

Significant components of our deferred tax assets and liabilities are as follows:

	2016			2015
(In thousands)
Deferred tax assets:
Stock compensation expense	$	4,006		$	4,857
Deferred compensation		7,629			1,268
Capital lease obligation		944			905
Other		311			287
Total deferred tax assets		12,890			7,317
Deferred tax liabilities:
Investments in securities available for sale		(6,805	)		(5,443	)
Contingent deferred sales commissions		(322	)		(419	)
Intangible asset amortization		(235	)		(111	)
Other		(9	)		-
Total deferred tax liabilities		(7,371	)		(5,973	)
Net deferred tax assets (liabilities)	$	5,519		$	1,344

As a result of the vesting of RSAs, and in accordance with GAAP, decreases of $0.4 million and $1.2 million were recorded in additional paid in capital for the years ended December 31, 2016 and December 31, 2015, respectively, as the actual tax benefits realized by the Company were less than the previously recorded deferred tax benefits.

As of December 31, 2016 and 2015, the total amount of gross unrecognized tax benefits related to uncertain tax positions was approximately $15.0 million and $18.4 million, respectively, of which recognition of $9.8 million and $11.9 million, respectively, would impact the Company’s effective tax rate.

As of December 31, 2016 and 2015, the net liability for unrecognized tax benefits related to uncertain tax positions was $14.1 million and $17.6 million, respectively, and is included in accrued expenses and other liabilities on the consolidated statements of financial condition.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits related to uncertain tax positions is as follows:

	(in millions)
Balance at December 31, 2013	$	12.9
Additions based on tax positions related to the current year		3.1
Additions for tax positions of prior years		-
Reductions for tax positions of prior years		-
Settlements		-
Balance at December 31, 2014		16.0
Additions based on tax positions related to the current year		2.8
Additions for tax positions of prior years		0.1
Reductions for tax positions of prior years		(0.5	)
Settlements		-
Balance at December 31, 2015		18.4
Additions based on tax positions related to the current year		2.3
Additions for tax positions of prior years		1.2
Reductions for tax positions of prior years		(6.9	)
Settlements		-
Balance at December 31, 2016	$	15.0

The Company records penalties and interest related to tax uncertainties in income taxes. As of December 31, 2016 and 2015, the Company had recognized gross liabilities of approximately $6.7 million and $8.0 million related to interest and penalties, respectively. For the year ended December 31, 2016, the Company recorded an income tax benefit related to a decrease in its liability for interest and penalties of $0.7 million. For the years ended December 31, 2015 and 2014, the Company recorded income tax expenses related to an increase in its liability for interest and penalties of $1.1 million and $1.0 million, respectively.

The Company is currently being audited by the Internal Revenue Service for 2014, New York State for years 2007 through 2011 and the State of Illinois for years 2010 through 2012 but does not expect that any potential assessments will be material to its results of operations. The Company is subject to future audits by New York State for all years after 2011. The Company’s remaining state income tax returns are subject to future audit for all years after 2010. The Company’s Federal tax returns are subject to future audit for 2013 and 2015.